Congress Returns To Find Business At Work On Taxes

September 8, 1986|By John F. Persinos of The Sentinel Staff

Seldom has corporate America had so much at stake -- and so few days left to do something about it.

Congress returns today from a three-week recess to consider its mammoth tax-reform bill -- the most sweeping change of the tax code since the federal income tax was started in 1913. This week the final jockeying for favored treatment will reach a crescendo.

''The lobbying is furious now, but it's going to get fast and furious when congressmen get back into town on Monday,'' said Edward Meyers, program director at Citizens for Tax Justice, a tax research and reform group founded by Ralph Nader. ''You're going to see a lot of corporate shills in $700 suits and Gucci shoes running around Capitol Hill.''

After dramatic roller-coaster haggling, the House-Senate conference committee approved the outlines of the tax bill Aug. 16, then headed home for summer vacation. Congressional staffers are now hammering the committee's proposals into legislative language.

The committee also left a number of important issues for staff members to resolve. Some of those issues -- notably ''transition rules'' to compensate companies for deductions eliminated in the bill -- are of vital importance to businesses in Florida.

As the bill takes shape, business lobbyists are lining up to make last- minute pitches to staff members and the congressmen who guide them.

For the individual taxpayer, however, the die is cast.

''In terms of individual taxes, I'd be very, very surprised if anything at all is altered in the bill,'' said David Keating, executive vice president of the National Taxpayers Union, a lobbying and informational group with a nationwide membership of 150,000 individual taxpayers.

For example, Keating said, the bill's provisions to limit deductions for Individual Retirement Accounts are unpopular, but untouchable. ''It would be an absolutely hopeless cause to try to change the provisions limiting IRAs,'' he said.

''We're waiting until next year.''

About 50 tax writers are laboring over the bill. They expect to submit the bill to the House by Friday. If passed there, the bill will go to the Senate. The rules of congressional debate prohibit either the House or Senate from amending the bill once it reaches the House. The House technically has the power to send it back to committee, but that is not likely. The bill enjoys enormous momentum, and it is widely expected to sail through both chambers.

Senate Majority Leader Bob Dole, R-Kan., has predicted the bill would reach President Reagan's desk as early as Sept. 20. Reagan, an ardent supporter of tax reform, has promised that he would sign it.

Lobbyists have no intention of throwing in the towel, however.

''Staffers are fleshing out the bill right now and crunching some hard numbers,'' Meyers said. ''Plenty of money is still at stake, and a small army of folks are lobbying hard.''

Tax writers are under instructions not to speak to the press. However, Ward Hussey, legislative counsel for the House and a leading participant in the drafting of the bill, said, ''It is my understanding there won't be any major changes.''

Meyers acknowledged that Congress rarely alters a conference committee's work -- especially work so arduously achieved -- and predicted that the bill would pass virtually intact. He also said top corporate leaders have largely acquiesced to the bill and are exhorting others to keep their mouths shut. Business people, however, are loath to admit it.

Corporations would lose a host of tax breaks in the bill, such as the 10 percent investment tax credit. Even though it would close many loopholes and dent many tax shelters, the bill also would slash the top corporate tax rate from 46 percent to 34 percent. ''That's a real victory for business,'' Meyers said. ''People are getting a bit carried away by calling this bill 'populist.' ''

Business isn't pleased that the bill would raise an additional $120 billion in corporate taxes during the next five years. Meyers pointed out, though, that the corporate tax burden would still be at, or below, its average historical level.

Under the Reagan administration, the corporate share of overall federal revenue has declined. According to Treasury Department statistics, corporate income taxes provided 17.9 percent of total federal tax receipts in 1970. By 1980 the number was 13.9 percent.

In 1985 corporations paid $61.3 billion in federal income taxes -- 9 percent of all federal tax revenue. According to the Joint Committee on Taxation, the tax bill would raise the corporate tab to about 13 percent.

''The $120 billion probably does no more than reverse all the money that Reagan gave to corporations in the 1981 tax bill,'' Meyers said. ''Business hasn't been trying to defeat the bill, nor will it begin trying, because corporate leaders and their hired guns realize that tax reform is inevitable and that opposing it carries too many political liabilities. And they realize that the bill could have been a lot worse.''